Federal budget cuts mean fewer services

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Posted on August 23, 2012 |

Editor’s note: This is the final story in a series looking at how federal funding cuts are affecting local nonprofits.

MIDDLEBURY –– Many Addison County nonprofits have struggled with financial uncertainty in the wake of the 2008 recession. Federal funding for these organizations decreased, causing many to scale back services or operational costs.

United Way of Addison County (UWAC), besides organizing volunteer and advocacy opportunities, provides financial support to many nonprofits. Kate McGowan, UWAC co-director, explained that the organization awards different grants to nonprofits that demonstrate their programs’ success as part of the organization’s community impact funding.

“When we raise funds a good portion goes into our grant process,” she said. “It’s a detailed process. We ask, how much do you do, how well do you do it and is anyone better off?”

While UWAC itself does not go after federal money, McGowan said that United Way officials see the effects of declining federal funds on nonprofits with which they work.

“We aren’t affected directly by federal and state cuts, but we certainly feel the impact on other organizations,” she said. “We see it in an increase in requests for dollars as agencies are scrambling to fill in gaps of funding from the federal level.”

Because the number of applications for grants increased, UWAC cannot fund the same percentage of applicants as it once did.

“The requests for funding from our community impact funding have increased 51 percent in the last six years,” McGowan said. “Six years ago we were able to fund 71 percent of requests and last year we were only able to fund 56 percent of requests. The largest jump in requests happened between our 2008 and 2009 campaigns, which correlates with the beginning of this troubled economy.”

According to McGowan, several nonprofits have had to scale back their programming due to a lack of funding.

“Many agencies really felt comfortable enough to run multiple programs,” she said. “What we have found in the last two years is that they are hunkering back down to basic programs, they’re down to one and it’s their essential service. I think they’re just trying to survive in many cases. They’re thinking, what are the most basic needs that we can meet at this point in time?”

Another concern for local nonprofits is uncertainty of where their funding will come from, McGowan said.

“The federal and state funds, not only has it been cut, but it seems to have been redeployed,” she said. “There’s a change in purpose, where it’s going, which agency might be handling those dollars. You have to plan for multiple options and then react. That’s a difficult model and another real stressor.”

Many nonprofits trimmed operating costs in response to funding cuts and financial insecurity. McGowan said that organizations often reduce employee benefits, freeze hiring or increase the already-full workloads of their staffs.

She added that economic turmoil increases demand for the services local agencies provide, while decreasing the amount of federal money available for nonprofits.

“Organizations are asked to do more with less,” McGowan said.

McGowan sees trends in initial changes made by nonprofits in reaction to these funding cuts and changes.

“One of the first things that goes when the budgets get tight is continuing education and training,” she said. “That is sadly neglected in times like these. That’s troubling because it’s so important to keep that up.”

She also noted that collaboration between organizations dwindles when funding decreases because organizations pull back and focus on their basics, even though working as a group could open more funding opportunities.

“Another piece that goes is collaboration, which takes longer and takes people out of the office to work together,” McGowan said. “When you’re doing more in the office you lose time to meet with others and work together. The ability to do group work diminishes. The tools that we need to fix these issues go first.”

The staff at UWAC encourages collaboration, McGowan explained. Multiple nonprofits working together increases their visibility and chances of getting funding, partly because they end up serving more people.

“We really have to join together to get funding,” she said. “It’s hard work to make that happen but it’s important. It’s a way to get other money into our community.”

UWAC used reserve money to help meet the increased demand for grants because donations, which usually make up their grant money, decreased.

“We’ve been tapping into reserves for a couple years and that’s not really a sustainable business model,” McGowan said.

“It’s a question of prioritizing,” she said. “Where are more needs emerging? Who found a lucky stash of cash that they can use so we can redeploy funds? It’s really tough to say we can’t fund you. That gap between requests and our capacity to fund has increased. It’s a faster rate than our campaign can keep up with.”

Despite these funding frustrations, McGowan is confident that UWAC will continue to have a positive impact in the county and help other nonprofits do so as well.

“United Way is committed to continuing to try to make a difference in our community,” she said. “We’re continuing to bring agencies together to work collaboratively for other funds that are available. We’re happy to look at different models if it can bring additional dollars into these agencies.”

She added that community members can also help make a difference.

“If people in the community have the means to get involved or give, now more than ever it’s important,” she said. “Get involved in discussion at the state and federal level, volunteer, give, advocate, get informed about what the issues are.”